A MARTÍNEZ, HOST:
The price of gas has jumped by about a dollar a gallon since the war with Iran began. That's based on a national average calculated by AAA. The closest gas station to my house is charging me 6 1/2 bucks a gallon.
STEVE INSKEEP, HOST:
Wow.
MARTÍNEZ: Energy - yeah. Energy executives have been discussing those prices at the annual conference known as CERAWeek. Karr Ingham is here with us, and he's there in Houston. He's a petroleum economist and president of the Texas Alliance of Energy Producers. Karr, so what's the mood right now in the industry?
KARR INGHAM: Well, the mood is certainly one of uncertainty, but principally, the mood is continuing to get up and do what these guys do every day, and that's pull crude oil out and natural gas out of the ground and bring it to the marketplace. But it's an interesting, unusual time. Obviously, this is the greatest global disruption in crude oil supply that I think we've ever seen. So that brings trepidation. It brings interest. It brings uncertainty, and just a concern about how long this is going to last.
MARTÍNEZ: OK. Because the other thing I was thinking, Karr, is because - so it's a product that everyone has to buy. No one really - or not many people can go without buying gas. And the prices are higher. So I thought there might be a little bit more happiness, too, being able to charge a lot for the product.
INGHAM: Well, it's a revenue spike for the companies, for sure, that are producing crude oil. But no, I wouldn't say there's jubilation about this event. I don't think there's any expectation that this is going to be a long-term event. It puts pressure on the companies when gasoline prices go up. I think companies would rather things normalize and return to whatever normal market circumstances are going to be outside of the Iran war. Will it add to coffers for a short term? Yes, but it creates problems as well.
MARTÍNEZ: OK. Now, the Trump administration seems to be counting on increased oil production to help insulate the U.S. from supply shocks. This is how Secretary of Energy Chris Wright framed it in a talk at CERAWeek.
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CHRIS WRIGHT: Markets do what markets do. Prices went up to send signals to everyone that can produce more, please produce more.
MARTÍNEZ: So what do you think, Karr, pretty good read on the situation?
INGHAM: Well, he comes from the industry, so he knows how this works, and he knows how markets work and he knows how the industry responds. And he knows deep down that there is going to be no near-term, short-term response in terms of an upward move in production that would do much of anything to mitigate these rising prices. So he's not wrong about that. That's exactly what markets do. They incentivize producers to produce more. And by the way, they also incentivize consumers to consume less, but there's not going to be enough of a response to do anything about this, and certainly not in a short few-week period of time.
MARTÍNEZ: One thing I've always wondered, Karr, is that since the U.S. is already the biggest producer of oil in the world, and we're still seeing these high prices because oil is a global market, why doesn't more American oil production mean cheaper oil for Americans?
INGHAM: Well, in fact, it probably does. Crude oil production in the United States is up by about 8 million barrels compared to 15 years ago, when we went into the explosion of U.S. domestic crude oil production as a part of the shale revolution. So these companies, in one fashion, have already done the work. They've added 8 million barrels a day to global supply and as you said, turned the U.S. into the world's largest single-country producer.
But there are 15 to 20 million barrels off the market now that are not making their way out of the Middle East through the Strait of Hormuz. And so while it's certainly true that prices are better now than they would be if the U.S. was only producing 5 or 6 million barrels a day, my goodness, the thought of making up that 15 to 20 million barrels a day. We're not going to add 200,000 barrels a day...
MARTÍNEZ: Wow.
INGHAM: ...In the U.S. or a half a million or a million anytime soon, and certainly nothing approaching what's off the market right now.
MARTÍNEZ: OK. Karr Ingham is president of the Texas Alliance of Energy Producers. Karr, thanks a lot.
INGHAM: Thank you. Transcript provided by NPR, Copyright NPR.
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